What are the stamp duty rates in 2013?

With mortgage lenders beginning to relax their restrictions, conditions have improved marginally for first-time buyers. There are a few extras to consider when planning a property purchase though. It is advisable to be aware of the stamp duty rates in 2013 when budgeting for the expense of bidding on a property.

Those hidden percentages

Stamp duty is a tax levied on most property purchases in the UK. The percentage varies according to the price you pay for a property, but be aware that you pay the full tax rate on any price above the threshold.

In the past, governments have temporarily waived stamp duty in order to help first-time buyers. That is not the case at present, although would-be purchasesrs should follow the market news carefully in case there are rumours of imminent changes to stamp duty.

The stamp duty rates for 2013 escalate according to the property value. Properties up to £125,000 are free of stamp duty. From £125,000 to £250,000 the rate is one percent. From £250,000 to £500,000, the main price range in the south, the rate is two percent. From £500,000 to £1 million the rate is four percent. From £1 million to £2 million the rate is five percent. Purchases above £2 million attract seven percent duty, but purchasers in that bracket probably aren't too worried about paying a couple of hundred thousand extra to the Exchequer.

For purchasers who have used all their cash for a deposit, it may be possible to add the stamp duty to a mortgage, although over the lifetime of the mortgage that will mean paying rather a lot of interest on a loan of a few thousand pounds.

Pay up or face a fine

After calculating what you owe in stamp duty rates for 2013, you need to pay the total within 30 days of completing the property purchase. Most solicitors will include this as part of their service, but check that the tax is paid, or you may face a fine and additional interest charges.